Hybrid Carmaker Fisker Takes Over GM Factory

Startup firm Fisker Automotive announced today that it will build its next-generation hybrid sedan, with a $528 million loan from the DOE, in a now-closed GM factory in Wilmington, Del. Is this the first step to a new and improved U.S. auto industry?

In what could signal the first step of a radically evolving auto industry, startup firm Fisker Automotive announced today that it will build its next-generation hybrid sedan in a now-closed GM factory in Wilmington, Del. The facility originally opened in 1947 and most recently produced the Saturn Sky and Pontiac Solstice. GM closed the plant last summer as part of its on going reorganization effort.

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Vice President Joe Biden, who was a Delaware senator for 36 years, made a fiery speech during the event. "The American auto industry," he said, "is once again going to be the best in the world." Last summer, Fisker received a $528 million loan from the Department of Energy to produce hybrid cars in the U.S. "Folks, we're making a bet and today is the first evidence that the bet is starting to pay off," Biden said, referring to Fisker's loan.

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Fisker already plans to debut a plug-in hybrid called the Karma next summer. The four-door Karma uses a lithium-ion battery pack and a GM-sourced 2.0-liter turbocharged gas engine. The claimed EV range is 50 miles and it will cost around $80,000.

The Karma, however, will be built in Finland. The GM plant--and the loan money--will be used to produce a new, more affordable family-oriented plug-in hybrid sedan, known as Project NINA. Fisker says the new car will cost $39,900 after federal tax credits and will roll off the line in three years. The irony here is that Fisker plans to build a competitor to the Chevy Volt in one of GM's old factories. While half a billion dollars is a lot of money, it doesn't go very far when setting up a new car plant. Fisker's success in Delaware depends on how much of GM's old equipment is included and whether the old hardware is transferable to Fisker's new model.

"We don't know what's included in the plant sale," says Jim Hall, an auto analyst at 2953 Analytics, "This is a puzzle; They have a plant, some of it they can use and some of it they can't" he tells PM. "What I'd really want to get is a paint booth, provided it's already OSHA and EPA approved, because that part is really expensive."

Of course, there's the risk that the taxpayer-funded loan may not bear fruit. For Fisker, however, the Delaware plant is a good opportunity because it's already set up to produce a high-volume car. "You can't just build a car anywhere, especially a high-volume car," Hall says, "You need rail capability to get the cars to the railroad and ship the cars around the country. There's a lot of stuff you need to have and its all at that plant."